Transfer Duty Concessions - Farm Land

Intergenerational Farm Transfers - Transfer Duty Concessions for the Family Farm

The Queensland Government has a support package for rural Queensland, which includes abolishing transfer duty on family farm transfers. These changes are aimed at dealing with legacy issues within the Queensland family farming sector by making it easier, in the financial sense, for children to buy out their parents who are seeking to retire.

Farming Transfer Duty Concessions - Background

Under previous legislation transfer duty concessions only applied to the transfer of farm land (and associated livestock, plant and equipment etc) between family members where that transfer was a ‘gift’. Succession planning was therefore an expensive undertaking for rural families, as parents could often not afford to give their major asset (being the farm) away to their children for nothing. Children who wanted to continue their family farm would have to come up with large amounts of money to pay the transfer duty.

However, from 1 July 2016, the Duties and Other Legislation Amendment Bill 2016 (Qld) removed the requirement that family farm transfers be by way of gift in order for the relevant duty concession to apply.

Under the new legislation the concession is available for any transfer of ‘business property’ provided that:

1. the transferor is a ‘defined relative’ of the transferee. ‘Defined relative’ is a broad term which includes but is not limited to spouses, parents, grandparents and children; and
2. the transferee acquires the business property in their personal capacity; and
3. the person transferring the property carried on the business for which the property is used; and
4. the transferee intends to carry on the business.

What does this mean for you?

Under these legislative changes, the transfer of the family farm from one family member to another is now exempt from transfer duty, even where that transfer is not by way of gift. Importantly, this concession also applies to any residential land, provided it is adjacent to the land used to carry on the business (i.e. the farm).

These changes are important from an estate planning perspective, and allow farming families to carry out their business succession plans in a more cost effective method than previously possible.

If you are looking to sell or purchase land used to carry on a primary production business, to or from family members, please feel free to contact our office on (07) 4963 2000 or via our online contact form to discuss the options available to you and to ensure that you receive the benefit of these legislative changes.

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